10-7-08Merced Sun-StarMerced City Council confirms next city manager...SCOTT JASONhttp://www.mercedsunstar.com/167/story/486536.htmlA split City Council hired John Bramble on Monday night as the next city manager, ending the seven-month search for who will oversee the budget and staffing through one of Merced's worst economic downturns. Bramble, city manager for Brighton, Colo., will begin Dec. 1 and replaces Jim Marshall who’s been serving the city on an interim basis until the search concluded. Mayor Ellie Wooten and council members Noah Lor, Michele Gabriault-Acosta and Jim Sanders voted to hire Bramble during a closed session conference before the meeting began. Councilman Joe Cortez, Bill Spriggs and John Carlisle dissented...After the meeting, Spriggs was blunt. “He was not the best candidate,” he said, and noting that Bramble’s 62, added, “He’ll be here for three years, and he’ll be out of here. I think hiring him was unconscionable.”...Bramble will start with a yearly salary of $171,653, the same wage as Marshall. He also has four weeks vacation and a nine-month severance package.Before the council voted on Bramble’s salary and benefits, Carlisle said he was concerned about the contract being five years and that he could cash out 10 days of administrative leave — if unused — in December, the end of the calendar year.The city found Bramble with the help of a professional headhunting firm, which was paid about $30,000. The search lasted longer than expected, partly because the council decided to do a background check on Bramble. It came back clear, Wooten said last week. Assistant City Manager Bill Cahill was one of the candidates the council was considering and his hiring seemed all but likely in mid-August. Word of it spread through parts of Merced’s business community and around City Hall.One council member, who asked to remain anonymous, said that promoting Cahill was met with resistance from some staff, prompting the council to continue the search...Modesto BeeBorrowers get a lifelineDeal offers help on loans that toppled Countrywide...J.N. Sbrantihttp://www.modbee.com/local/story/454628.htmlThere may be a way out of trouble, after all, for thousands of Northern San Joaquin Valley borrowers struggling with risky housing-boom mortgages from Countrywide Financial Corp.A legal settlement announced Monday by Countrywide's new parent company, Bank of America, and California Attorney General Jerry Brown, promises an $8.4 billion rescue nationwide to save an estimated 400,000 homes from foreclosure. That includes Countrywide cutting $3.5 billion in loan obligations to save about 125,000 homes in California.Bank of America agreed to freeze and cut interest rates, suspend foreclosures and waive late fees for live-in homeowners. Some who lost homes are eligible for aid. The firm said it will begin reaching out Dec. 1 to borrowers deemed eligible.It wasn't clear how many borrowers in the valley might get relief, but it's likely to be thousands.More than 35,900 mortgages and home-equity loans -- worth more than $7.4 billion -- were made by Countrywide from January 2004 to December 2007 in Stanislaus, San Joaquin and Merced counties, according to statistics from MDA DataQuick, a real estate research firm.That's the period covered by the settlement, but only borrowers who received subprime loans or payment option adjustable-rate mortgages will be helped."This is great news for borrowers. It shows positive movement by Bank of America on behalf of Countrywide borrowers," said Martha Lucey, president of ByDesign Financial Solutions, which provides free foreclosure prevention and housing counseling in Stanislaus, San Joaquin and Merced counties.Bank of America bought Countrywide -- once the nation's largest mortgage lender -- in July after the company imploded under the weight of its defaulting loan portfolio.Brown described Monday's settlement as "the biggest mandatory loan reduction in American history." "With this settlement, homeowners will receive direct relief from the catastrophic damage caused by Countrywide," Brown said. "Countrywide's lending practices turned the American dream into a nightmare for tens of thousands of families by putting them into loans they couldn't understand and ultimately couldn't afford." Even though it often was independent mortgage brokers -- not Countrywide employees -- who filled in the loan documents that got homeowners into trouble, Countrywide ultimately was responsible, according to Eduardo Morales, a housing counselor for El Concilio in Modesto...Economists think Monday's settlement will help ease the housing crisis."This is strongly a positive step to start stabilizing the home market," said Stephen Levy, director of the Center for the Continuing Study of the California Economy. "This is probably bigger than the (Wall Street) rescue plan."...But the Countrywide settlement is limited to helping those who took out only two kinds of loans:Payment option loans, often called option ARMs. Those are mortgages that grow larger as most people make a minimum payment. Between their third and fifth years, their monthly payments can double or triple.Subprime loans. Those are high-cost loans of last resort for buyers who had a history of not paying off loans. They, too, are prone to sizable jumps in monthly payments. Both loans contributed to more than 22,000 foreclosures in Stanislaus, San Joaquin and Merced counties in the past 12 months."For owners with subprime and option ARM loans, this could really make a difference," said Lucey.The deal offers no help, however, for those with traditional loans, like fixed-rate mortgages or regular ARMs, said Peter Covets, branch manager for Guild Mortgage Co. in Modesto.Covets said those who made conservative decisions about what they borrowed may see this deal as "a reward for irresponsible behavior." How does mortgage deal work?...last updated: October 07, 2008 07:38:18 AMhttp://www.modbee.com/local/story/454775.htmlHere's the deal announced Monday to help those who got certain mortgages from Countrywide Home Loans, Countrywide Financial Corp. and Full Spectrum Lending. The settlement won't be implemented until Dec. 1 so the company can train its staff. The deal only is for those who started paying on mortgages from Jan. 1, 2004, through Dec. 31, 2007. Only subprime and pay-option, adjustable-rate mortgage loans are covered. Only owner-occupied homes will be eligible. This is what was agreed to in California: ٠ Suspension of foreclosures on owner-occupied homes with subprime and pay-option, adjustable rate loans. The lender will determine whether those borrowers can afford modified loans.٠ Loan modifications, valued at up to $3.4 billion, to reduce interest payments. Certain borrowers also will have loan principals reduced. ٠ Waiver of late fees of up to $33.6 million.٠ Waiver of prepayment penalties of up to $25.6 million for borrowers who receive modifications, pay off or refinance their loans. ٠ Payments of up to $27.9 million to borrowers who are 120 or more days late or whose homes have been foreclosed on. ٠ About $25.2 million in extra payments to borrowers who, in the future, cannot afford monthly payments under the loan modification program and lose homes to foreclosure. ٠ The loan balance must be 75 percent or more of the current value of the home, and the borrower must be able to afford adjusted monthly payments under the modification. The terms of the modification will vary, based on the loan:٠ Pay-option ARM loans, in which balances increase each month if a borrower makes only a minimum payment. Borrowers may be eligible to have principal reduced to 95 percent of their home's current value and may also qualify for an interest-rate reduction or conversion to an interest-only payment.٠ Subprime adjustable-rate loans, such as 2/28 loans. Borrowers may have their interest rate reduced to the initial rate. If the borrower still cannot afford it, the borrower may be eligible for further interest-rate reductions to as low as 3.5 percent. ٠ Subprime fixed loans. Borrowers may be eligible for interest-rate reductions. ٠ Hope for Homeowners Program. Some borrowers may be placed in loans made through this federal program. ٠ Alt-A and prime loans. Borrowers who are in default but have Alt-A and prime loans may be considered for modifications.Fresno BeeLocal home sales strengthen in Fresno and Clovis..Sanford Naxhttp://www.fresnobee.com/business/v-printerfriendly/story/918370.htmlThe number of houses for sale in Fresno and Clovis is shrinking and mortgage firms are once again hiring people as bargain-basement prices are enticing more people into the marketplace, real estate officials say. More than 535 existing houses were sold in September in the metropolitan region -- the fourth consecutive month of 500 or more transactions, said Don Scordino, president of the Fresno Association of Realtors. "First-time homebuyers are out in good numbers, and we're seeing investors come back into the market again," said Michael Gilmore of Royal Charter Mortgage in Fresno. About 54% of the deals last month were foreclosures. Through the first three quarters of 2008, 1,756 bank-owned properties were sold in Fresno and Clovis. That compares with only 213 in the same period in 2007.That robust activity is helping reduce a glut of listings. Scordino said 3,187 houses are for sale in Fresno and Clovis, a decrease of 31.4% from a year earlier and a 7.6% drop in a month. Still, the real estate market is clearly troubled. In a typical market, first-time homebuyers purchase the less-expensive homes, which enable sellers of those houses to move up to higher-priced properties. Those sellers, in turn, move up again. But with banks selling more than half of all the houses, there is no move-up buyer. That is reflected in the dismal new-home market, where production has hit bottom.The 92 building permits issued in Fresno County in August were down one-third from July and were a 37.7% decrease from August 2007. "It's tough for the builders [to reduce prices enough to attract first-time homebuyers] given that a lot of them bought land at a premium," Gilmore said. "Banks are not going out and buying a bigger house," he said. "Until we work through this inventory of foreclosure properties, that trickle-up effect won't get any footing." And some experts argue that a "shadow inventory" of bank-owned properties is not being counted. Those are houses that are repossessed by banks and not immediately listed for sale -- either by design or because the lenders don't have the capacity to process them faster."Banks are sitting on the inventory and don't have them listed yet," said Sean O'Toole of Foreclosures.com. He said 565 houses were auctioned off at the courthouse steps in September in Fresno County, and most of those went back to banks. Many have yet to hit the market. Still, sales activity is strong -- and that's because the median price has fallen to $195,000, down 30.3% from $280,000 a year ago.Real estate agents report bidding wars for many houses. Gilmore's company is expanding, preparing for what he says is an inevitable rebound. Mortgage company Royal Charter is opening an office in Merced -- a ground zero for foreclosures -- and in northwest Fresno...More banks are offering incentives, such as down-payment assistance, in an effort to peddle their troubled properties. "They are giving up to 6% of the selling price as a concession," said Mike Gavin, a Guarantee Real Estate agent who is selling five to six bank-owned houses a month. Investors also are back making deals, although they aren't the force they were when the market boomed. About 19.4% of all transactions in Fresno and Clovis in July-September were to potential investors, according to a survey by the Fresno Association of Realtors...Tom Hyatt, who heads an investor group that meets regularly in Fresno, said the uncertainty of the stock market is likely to fuel interest in real estate. "They are trying to find a safer place to put their money," he said... High-speed rail pays offNew study says Valley will greatly benefit from building system...Editorialhttp://www.fresnobee.com/opinion/v-printerfriendly/story/918219.htmlA new study clearly defines the benefits to the Valley of the proposed high-speed rail project -- and the tally is in the billions of dollars. The report, authored by Shawn Kantor, a professor at the University of California at Merced, says the direct economic benefits of savings in the Central Valley -- which includes the Sacramento and San Joaquin valleys -- would total $3 billion annually. Some of those benefits would come in the form of savings of time and money as passengers shift from cars and airplanes to the less-expensive trains. There would also be savings in travel time, reduced freeway and airport congestion, lowered accident risk and productivity gains from train travel -- it's easy and safe to use a laptop or a phone on a train; it's not advisable from behind the wheel of a car on Highway 99. Economic benefits would include thousands of new jobs, many very well-paying, both in construction and subsequent operation of the trains. Kantor points out that the Valley -- where the longest single stretch of tracks will be -- would absorb somewhere between 15% and 40% of the $40 billion it's estimated the system will cost to build.Building the system would have a "pronounced effect" on service, communications, utilities, finance, insurance and real estate sectors of the Valley economy, Kantor found. It gets better. The high-speed system will permit the Valley to more fully participate in the statewide economy, Kantor said. "Market integration" would mean as much as $48 billion annually in new income. Kantor's study bolsters the argument in favor of Proposition 1A, the $9.9 billion bond measure on the November ballot that would jump-start the construction of the nation's first true high-speed rail system. We have long maintained that all the regions of the state -- even those not directly served by high-speed rail -- would benefit from its construction, but we've also felt that the Valley stands to gain the most. We'll see enormous economic benefits, from the jobs created to build and operate the system to greater connectivity with the rest of the state. We'll see cleaner air as many drivers and air passengers choose the high-speed alternative. And we'll start to get those benefits sooner than most. The system's first stretch of track is likely to connect Bakersfield and Merced, through Fresno. The trains must be tested and certified before the system opens, a process that will take two to three years. And the only place in the 800-mile system where the trains will run at top speed -- about 220 miles per hour -- is through the Valley. So that test track, which will later form part of the full system, will be built here. The economic case for high-speed rail is well-established. It's even more important in tough times like these, when there's such a great need for jobs and investment. PHILADELPHIA INQUIRER: Nuclear power's catch: waste...Editorialhttp://www.fresnobee.com/644/v-printerfriendly/story/919382.htmlAmerica's realization that it must kick its expensive foreign-oil habit has energized the previously moribund nuclear power industry, which is proudly selling itself as the cheaper, cleaner alternative. The Nuclear Regulatory Commission is considering at least a dozen applications for new power plants, and it expects to receive 23 more applications within two years. Nuclear power should be included in the panoply of preferred alternatives to fossil fuels - along with wind, solar, geothermal, hyrdroelectric energy and anything else that weans the nation from its $700-billion-a-year taste for foreign oil. The experiences of both Europe and our own country over the past two decades have shown that nuclear power can be provided much more safely than when the words Three Mile Island or Chernobyl would stifle any mention of building new plants in the United States.America's realization that it must kick its expensive foreign-oil habit has energized the previously moribund nuclear power industry, which is proudly selling itself as the cheaper, cleaner alternative. The Nuclear Regulatory Commission is considering at least a dozen applications for new power plants, and it expects to receive 23 more applications within two years. Nuclear power should be included in the panoply of preferred alternatives to fossil fuels - along with wind, solar, geothermal, hyrdroelectric energy and anything else that weans the nation from its $700-billion-a-year taste for foreign oil. The experiences of both Europe and our own country over the past two decades have shown that nuclear power can be provided much more safely than when the words Three Mile Island or Chernobyl would stifle any mention of building new plants in the United States.But while plant safety may have improved greatly, there has been little progress on solving the overarching problem of where to put radioactive waste - the lethal leftovers that can remain dangerous to health and life for centuries. Six years ago, Congress approved a plan to transport waste from nuclear plants to Nevada's Yucca Mountain. But it was only four months ago that the Department of Energy submitted a waste repository application to the NRC. If approved, the first waste shipment isn't expected to be sent to Yucca before 2020. Meanwhile, the 64,000 tons of spent fuel now being stored on-site at nuclear power plants in 33 states will continue to grow. But America's nuclear-waste problem is much more pervasive than that. It involves not just what the nation's existing power plants produce, but also the low-level radioactive material found in hospitals, universities and in other industries.There are only three commercial landfills in the nation authorized to receive this material, and one of them, in Barnwell, S.C., has closed its doors to all but three states. A facility in Hanford, Wash., accepts low-level waste from 11 states. The remaining 36 states have only one place to turn - a disposal site 80 miles west of Salt Lake City. EnergySolutions, operator of the Tooele County, Utah, facility, isn't satisfied with being the biggest recipient of low-level waste in the nation. The rest of the world offers lots of customers with the same problem.EnergySolutions has filed suit to void the rejection of its proposal to import 20,000 tons of radioactive waste from Italy. The rejection came from the Northwest region's radioactive waste-management authority, but EnergySolutions argues the agency exceeded its jurisdiction. The company may be right. That's why there's an effort in Congress to ban the import of nuclear waste from foreign countries. Seems like a no-brainer, but critics point out that accepting the premise that nuclear waste should stay where it is generated sets a bad legal precedent for states that want to ship their glowing garbage cross-country. The Utah situation is just more evidence that our nation must get a better grip on handling nuclear waste if it is determined to increase its reliance on nuclear energy. Stockton RecordPublic meeting on Delta project set...The Recordhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20081007/A_NEWS/81006019/-1/A_NEWSSTOCKTON - A project at Franks Tract that state officials say would improve the Delta will be the subject of a public meeting at 6 p.m. Thursday.The plan includes installing gates that would control the flow of water at key locations: Threemile Slough and/or the West False River. This would reduce the amount of sea water creeping into the Delta and would help fish move to areas of better habitat, the state Department of Water Resources said.Helping fish would, in turn, improve the reliability of the pumps that send water south to farms and millions of urban residents. One Delta advocacy group, the California Sportfishing Protection Alliance, questions on its Web site whether the Franks Tract concept is a "thinly disguised plan to channel more fresh water south."Thursday's meeting is at the Stockton Memorial Civic Auditorium, North Hall, 525 N. Center St. Public comments on the project are due Nov. 21.San Francisco ChronicleThe toxic mercury menace in San Francisco Bay...Jane Kay, Village Greenhttp://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=50&entry_id=31179It's been long known that mercury from old mines leaks into the San Francisco Bay from the hills above San Jose where the New Almaden Quicksilver Mine operated for more than 120 years before it was shut down in the 1970s. Gold mining also washed mercury, a potent neurotoxin, into tributaries to the bay where it ultimately contaminated the estuary's aquatic life.By now, the mercury threat to bay life is a grim fact of life. The bigger fish eat the smaller fish, and the mercury accumulates up the food chain at higher concentrations. People who eat a lot of fish from the bay unfortunately face unnecessary risk, particularly pregnant women and children. Health officials have posted warning signs in fishing spots, cautioning that the toxic metal can cause neurological and developmental problems, especially for the sensitive fetus.Over the past decade, the San Francisco Estuary Institute, an Oakland science center financed in part by businesses that legally discharge treated waste to the bay, has monitored for mercury.In a brand new report on bay mercury, UC Davis research ecologist Darell Slotton contributes evidence on how the contamination mechanism works by testing small fish in the northern bay and the delta of the Sacramento and San Joaquin rivers. He confirmed that occasional flooding of areas that are usually dry can drive the production of methylmercury, the toxic form that accumulates in the food web. Methylmercury is created when elemental mercury, the form used in gold mining, combines with organic materials, often wetlands.Previous studies by U.S. Geological Survey and U.S. Fish and Wildlife Service in the southern reaches of the bay and parts of the northern bay have shown methylmercury contaminates Forster's terns, black-crowned night herons, stilts and even the endangered California clapper rail. In some birds, the mercury levels are so high that the hatch fails.This latest findings in the northern part of the bay show that tidal wetlands that remain inundated, or stay wet without periodic drying cycles, have relatively low methylmercury. The Napa Marsh and parts of the Delta fall into that category.However, mercury levels are higher in the Petaluma Marsh, threaded by narrow channels and inundated every month or two by high tides or winter flooding, and in the Colusa Drain, which moves water from rice fields and managed wildlife habitat that gets flooded with changing seasons. Places on the San Joaquin and Cosumnes rivers and the Yolo Bypass, which also share the common characteristics of drying and then flooding, have some hot spots, the researchers found.The San Francisco Bay Regional Water Quality Control Board has set limits on mercury discharges to the bay, and is working with cities and counties to cleanup old waste sites and stop the toxic runoff.Richard Looker, an engineer at the regional board, said in a statement that accompanied the release of the new findings that the new research could be used to guide control of mercury contamination in the bay.Deadlines set for designating polar bear habitat...DAN JOLING, Associated Press Writerhttp://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/06/national/a143304D64.DTL&type=printableThe federal government will designate "critical habitat" for polar bears off Alaska's coast, a decision that could add restrictions to future offshore petroleum exploration or drilling.Federal law prohibits agencies from taking actions that may adversely modify critical habitat and interfere with polar bear recovery. That likely will affect oil and gas activity, said Kassie Siegel of the Center for Biological Diversity, one of three groups that sued to force the critical habitat designation."Other than global warming, the worst thing that's going on in polar bear habitat right now is oil development and the potential for oil spills," Siegel said.Bruce Woods, a spokesman for the U.S. Fish and Wildlife Service in Anchorage, said it's not known what area in the Chukchi Sea off Alaska's northwest coast might be designated for polar bears, especially given that sea ice conditions are changing and areas now covered by ice might in the future be open water.The agreement to designate critical habitat was filed Monday as part of a partial settlement of a lawsuit brought by Greenpeace, the Natural Resources Defense Council and Siegel's group.They filed the lawsuit in March after Interior Secretary Dirk Kempthorne missed a January deadline for declaring polar bears threatened or endangered.Kempthorne on May 14 declared polar bears "threatened," or likely to become endangered, citing polar bears' need for sea ice, the dramatic loss of sea ice in recent decades and computer models that suggest sea ice is likely to further recede in the future.Polar bears use sea ice to hunt seals. Summer 2007 set a record low for sea ice in the Arctic. The ice melt this summer was the second lowest on record, according to the National Snow and Ice Data Center at the University of Colorado.Oil and gas development was not seen as a major factor in the listing decision.Siegel said in most cases, critical habitat must be designated at the same time a species is listed as threatened or endangered.Under the settlement filed in U.S. District Court in Oakland, Calif., a proposed critical habitat rule will be issued next year, and will be subject to public comment and public hearings, Siegel said.The settlement sets a deadline of June 30, 2010, for a final rule designating critical habitat for the polar bear.Environmental groups monitoring the Arctic have long complained that federal regulators routinely grant permits for petroleum exploration without adequately considering consequences for whales, polar bears, walrus and other marine mammals.Seismic surveys involve firing off loud air guns and critics contend that safety zones and other measures are inadequate. They say boats, drilling platforms and aircraft will add to bears' stress by causing them to flee and expend more energy.Conservation groups also say oil companies have not demonstrated they can clean up an oil spill in broken ice. Ice jams skimmers, tears up containment boom, clogs pumps and impedes access to floating crude, and a cleanup off Alaska's coast could be slowed by extreme cold, moving ice, high wind and low visibility,Andrew Wetzler of the Natural Resource Defense Council said designation of critical habitat is one of the most powerful and important protections offered by the Endangered Species Act to animals and plants on the brink of extinction.The settlement Monday also requires the Interior secretary to issue guidelines for non-lethal deterrence of polar bears that pose a threat to public safety in villages or other populated areas.According to the groups, the settlement Monday does not address their claim that Kempthorne should have listed polar bears as endangered instead of threatened.They also claim Kempthorne violated the law by issuing a special rule exempting polar bears from protections otherwise provided by the Endangered Species Act.The groups said the case is expected to be heard early next year.Five lawsuits have been filed in Washington, D.C., to overturn this listing of polar bears as threatened.One was filed by the state of Alaska on orders of Gov. Sarah Palin, the GOP nominee for vice president.Santa Cruz SentinelToxic dust findings concern Davenport residents, Cemex workers; more info sought...Shanna McCordhttp://www.santacruzsentinel.com/ci_10652633DAVENPORT - The only complaint Cindy Escobar has had with living less than a half-mile from a cement factory is the constant cement dust that falls on the front deck of her Marine View Avenue home. She took care of the nuisance earlier this year by painting the deck gray."Otherwise it's too difficult to keep clean," Escobar, 48, said Monday. "The gray blends in better now."The Davenport native lives in what she calls the "drop zone" of Cemex dust, and dealing with it has always been a part of life on the North Coast.She's never worried about environmental and health hazards from the plant. In fact, Escobar has worked in the Cemex cement laboratory for 18 years, mixing and testing various grades of cement before they go to market.However, information released last week from the Monterey Bay Unified Air Pollution Control District that high levels of a cancer-causing chemical agent known as chromium 6 have been detected at the elementary school and fire department has Escobar worried about the consequences of that exposure for her and her family, which includes two grown children, and her co-workers.The levels of chromium 6 measured in Davenport were eight and 10 times higher than acceptable state standards, according to Ed Kendig of the Monterey Bay Unified Air Pollution Control District.The chromium tests were conducted June 10-Aug. 5.Escobar says she hasn't had any major health issues, but would welcome medical testing specific to the carcinogenic material. "My concerns are with the exposure I've had," she said. "I want to know how does a person get tested if they've been exposed. I want to ask my doctor."Chromium in the airAir monitoring of the area will continue 24 hours a day while the air district, Cemex and other state officials investigate the circumstances and determine a solution.An air sample was sent to a lab in Pittsburg on Monday, though air district officials expect chromium levels to be low or nonexistent compared with samples taken earlier because the Cemex plant has been closed for more than a month due to the weak economy. This is the longest the cement factory has stayed closed because of low demand in the marketplace, though employees say they usually have short closures during the winter rainy season.The company has promised to remain closed until the chromium 6 problem is resolved.The amount of chromium 6 detected in Davenport poses a cancer risk of up to 102 in 1 million people if continuously exposed for 70 years, according to California's strict chromium standards, Kendig said.The same samples would measure 10 in 1 million people by the federal Environmental Protection Agency's benchmark. Kendig said."If the EPA risk factor were used, there would be no notice, no hubbub," he said. "The amounts of chromium 6 are very small, and the cancer risk, while elevated to a region that's unacceptable, it's not particularly high."You have a much higher risk of getting cancer living next to a freeway. Breathing in diesel exhaust makes this situation look like a day in the park."Cemex officials believe the culprit for the chromium 6 is mill scale and steel slag, two cement-making materials of high chromium content that can easily produce chromium 6. They say they'll find nonchromium materials, such as iron, to produce cement before the factory starts again.Erin BrockovichChromium 6 is the same toxic substance that inspired the movie "Erin Brockovich" in 2000.Brockovich helped investigate the leakage of chromium 6 in the ground water of Hinkley by Pacific Gas and Electric Co.'s compressor station in the mid-1990s and landed the town's 600 residents a tort injury settlement of $333 million.Brockovich, who still works on environmental issues around the world, is aware of the Davenport case and plans to send a representative to today's Board of Supervisors meeting and tonight's Pacific Elementary School board meeting.Her representative in Los Angeles said she might visit Santa Cruz County within the next week."I have received your e-mail and from others in the community," she wrote in an e-mail to the Sentinel on Monday. "I am looking into this situation and planning on sending someone to the area and having a community meeting." ...What is chromium 6? Chromium is found in many natural materials. High-chromium content materials such as rocks and limestone can create chromium 6 when heated up to high temperatures. During cement production, a 3,500-degree oven turns raw material to clinker, a rock that gets crushed to make cement. Extreme heat in the kiln can cause oxidation and convert chromium to chromium 6. Besides cement production, the toxic metal is often used in metal plating, the aerospace industry, stainless steel processing and dye manufacture. ...Carcinogenic dust found in Davenport...Shanna McCord...10-4-08http://www.santacruzsentinel.com/ci_10637160?IADID=Search-www.santacruzsentinel.com-www.santacruzsentinel.comDAVENPORT -- High levels of a cancer-causing chemical agent known as chromium 6 were detected in the air at the elementary school and fire department in Davenport during tests conducted by the Monterey Bay Unified Air Pollution Control District this summer.Chromium 6, the contaminant that inspired the movie "Erin Brockovich," is present in rocks, limestone and other natural matter, and has been known to cause cancer after long-term human exposure.The toxic substance is believed to originate from dust at Cemex, the nearby cement factory.Results of the air monitoring -- conducted June 10 to Aug. 5 -- were released from the air district this week to county officials."It's been going on for a few years," said Ed Kendig of the Monterey Bay Unified Air Pollution Control District, which oversees air quality in Santa Cruz, Monterey and San Benito counties. "We're going to find out exactly how long and determine exposure because time of exposure matters."The levels of chromium 6 measured eight times the air district's acceptable level at Pacific Elementary School and 10 times at the Davenport Fire Department. Both are located less than a half-mile from Cemex.The average risk of cancer is 83 in 1 million at the school and 102 per million at the fire department, Kendig said. The probability of contracting cancer is based on a person being continuously exposed to the emissions for 70 years, he said.County Environmental Health Department officials say they don't have any statistics or anecdotal evidence that show the number of cancer cases in Davenport compared with other parts of Santa Cruz County. They are not aware of any increased incidents of cancer in the area."We've already started looking at that data and we're not seeing any differences," county health Division Director Steve Schneider said Friday. "The only data we have is countywide. We're trying to drill down and get more precise data."Kendig said Cemex employees have been cooperative in working with the air district to remedy the problem. "It's very clear they're taking this very seriously," Kendig said. "No decision has been made by the district in pursuing any enforcement action against Cemex."Cemex's long historyThe Cemex plant, located on the North Coast for more than 100 years, has been shut down for several weeks due to limited demand for cement in the marketplace. Company officials say they won't restart the plant, regardless of cement demand, until low chromium materials such as iron are found for local production.Cemex officials suspect the source of the chromium 6 is mill scale and steel slag, two ingredients in cement known for high chromium content. Cemex cement is stored in silos, not in outdoor piles like cement factories in other areas.Company spokeswoman Jennifer Borgen said that means the chromium 6-laced dust was likely blown from open doors and trucks carrying cement."We've developed an immediate action plan and when we restart the plant we'll suspend the use of mill scale and steel slag," Borgen said Friday. "Cemex is committed to the highest safety standards in its operations. Our manager and employees work and live in this community and we are committed to keeping it safe."Cemex is a worldwide company with more than 120 employees in Davenport. Some Davenport employees were medically tested for various contaminants in August, and were found to be clear of chromium 6, Borgen said. Such testing is routine for Cemex employees, she said.Borgen said chromium 6 has not been detected at any of the company's other 13 cement plants across the country.New testingThe local air district was prompted to test the air in Davenport after high levels of chromium 6 were linked to a cement plant in Riverside earlier this year.Air district officials set up vacuum pump monitors at the school and fire department, unbeknownst to Cemex or the community, to find out if the same thing was happening locally, Kendig said.The pump captured tiny, breathable particles from the air and attached them to a filter. The filter was sent to a laboratory in El Monte in Southern California for chromium 6 testing, and the unacceptable levels were discovered on Tuesday, Kendig said.The detection at Cemex is the first chromium 6 discovery in the tri-county region in recent memory, Kendig said. County Supervisor Neal Coonerty said the finding is "obviously of great concern," and he's called for various reports and actions from the air district, Cemex, county Planning Department officials and others to correct the situation and prevent a recurrence.The matter will be addressed at the Board of Supervisors meeting at 9 a.m. Tuesday.Pacific Elementary School has called a special board meeting for 6 p.m. Tuesday. The public is invited to attend and voice concerns and listen to officials from the air district, Cemex and the county talk about the situation."Right now, there's no fear for the children being allowed to play outside," Principal Sharon Smith said. "But we still have big questions and concerns. My first concern is our children and our staff."Another community meeting regarding chromium 6 is scheduled for 6:30 p.m. Oct. 14 at Pacific Elementary School.Los Angeles TimesAmid the gloom, legislators have some notable successesThe No. 1 example is a 'smart growth' plan to control suburban sprawl, build homes closer to downtown and reduce commuter driving to help cut climate-changing greenhouse gas emissions...George Skelton, Capitol Journal...10-6-08http://www.latimes.com/news/local/la-me-cap6-2008oct06,0,7517156,print.columnSACRAMENTO — Put down the pitchforks. Stop hurling the bricks. Politicians in the state Capitol have not been total screw-ups this year.Yes, the state budget was a record 85 days late in getting enacted and was roundly hooted. Gov. Arnold Schwarzenegger angered many -- mostly Democratic legislators -- by vetoing a record-high 35% of the bills that reached his desk.The Legislature began the year by failing to pass the governor's universal healthcare bill that was overly ambitious given the plunging economy. And the governor's promise of 2008 becoming "the year of education reform" turned into just another broken New Year's resolution. Pretty gloomy. But the scene wasn't all ugly. In some spots, it was downright visionary.In fact, there were several admirable instances of politicians legislating the way they're ideally supposed to, using the system the way it's set up, by calmly conferring and compromising.The No. 1 example was Sen. Darrell Steinberg's steering into law his sweeping "smart growth" proposal to control suburban sprawl, build homes closer to downtown and reduce commuter driving, thus decreasing climate-changing greenhouse gas emissions.Like Steinberg (D-Sacramento), the legislation isn't flashy. It's wonky. And substantive.California needed it 50 years ago.There'll be incentives for communities and developers to compress growth. Communities will get first dibs on government transportation money. Residential home-builders will be granted relief from environmental red tape.Steinberg worked for two years to build what he calls "the coalition of the impossible": local governments, home-builders and environmentalists. But he stopped short of trying to satisfy every interest.Commercial property owners and manufacturers also sought environmental streamlining. But that could have cost Steinberg the support of environmentalists. The senator settled on a bill he could get passed as time was running out in the legislative session.Then he had to sell the governor. There was business opposition, including from the influential California Chamber of Commerce. It helped that Steinberg had been elected the next Senate leader starting in December.It helped especially this way: Schwarzenegger badly wants the Legislature to pass a hefty water bond measure next year, something in the $11-billion range. The governor and U.S. Sen. Dianne Feinstein (D-Calif.) have been pushing for that, but making little progress. Schwarzenegger and Steinberg both capitalized on this desire for a waterworks deal in their deliberations over the land-use bill.Schwarzenegger wanted to "make sure that Steinberg was a team player, and not just on this bill," says one administration insider. Steinberg says he told Schwarzenegger that his success in building the anti-sprawl coalition "proves that the environmental community is willing to stretch. This could be a model for how we get a water deal done. But it's going to be very, very difficult for me to bring along the environmental community on much of anything else" if the land-use billwere to be vetoed.No quid pro quo. Just straight talk. Maybe some winks.Steinberg also solicited Feinstein's help, and assured her that he was "committed to trying to get a water deal."The governor's staff debated whether Schwarzenegger should sign the bill, which practically every Republican lawmaker had opposed. But, in the end, Schwarzenegger embraced the measure as if it were his own. He was drawn to it as a weapon in the fight against global warming, his pet project.In a signing ceremony last week, Schwarzenegger recalled that in 2006 he had signed a bill requiring a 30% cut in projected greenhouse gas emissions by 2020."We got world attention," he said. "Little did they know . . . that two years later there would be a sequel. . . . When you come from the movie business, you love sequels."Other significant bills that were passed and signed:* Chemicals -- Two more wonky bills will launch an effort by the state to regulate chemicals linked to cancer and other deadly ailments. The measures by Assemblyman Mike Feuer (D-Los Angeles) and Sen. Joe Simitian (D-Palo Alto) apparently are the most comprehensive anti-toxic, consumer protection laws in the country.The key to this legislative success was that the lawmakers didn't aim at specific chemicals in products, as others have. So they didn't generate overpowering opposition from single, monied interests. Also, their reliance on scientists -- rather than politicians -- to decide which chemicals are unacceptably toxic was reassuring to most of the industry.The authors teamed with the Schwarzenegger administration to shape the legislation."This can be a model of how to work together to accomplish big things," Feuer says.*  Water -- This is a tale of better late than never.Schwarzenegger reluctantly signed a modest, but much-needed, bill by Senate Leader Don Perata (D-Oakland) to use $842 million in bond funds previously approved by voters for a variety of water facility fix-ups, including improved flood control.The governor should have signed a similar measure last year, but held it hostage for a grand water package containing dams. Perata wouldn't bite and had logic on his side: Spend the money the state already has before asking voters for more.Schwarzenegger finally relented, concluding that flood control shouldn't wait and some Sacramento pump-priming would help a tanking economy.* "Clean money" -- The governor's staff didn't much care for it, but Schwarzenegger eagerly signed a bill that could lead to California's first public financing system for a state political race. The governor considers himself a reformer. And this is reform -- removing special-interest money from politicians' campaigns.The bill, by Assemblywoman Loni Hancock (D-Berkeley), will place before voters in 2010 a proposal to allow candidates for secretary of state to dip into the state treasury for $1 million in the primary and $1.3 million during the general election. They'd have to forgo private money.The financing would be a little weird: $350 annual fees assessed to Capitol lobbyists and their employers. It would be better if all the public paid.No legislation is perfect.Washington PostWachovia, Suitors Agree to TruceFed Urges Banks to Resolve Legal Battle...Binyamin Appelbaumhttp://www.washingtonpost.com/wp-dyn/content/article/2008/10/06/AR2008100601168_pf.htmlWachovia, Wells Fargo and Citigroup have suspended their courtroom squabbles until noon tomorrow to try to negotiate a settlement of Wachovia's future.The sides agreed to the truce under pressure from the Federal Reserve, which is eager for Wells Fargo and Citigroup to resolve their rival bids for control of the North Carolina bank. The extraordinary fight is unfolding amid general financial anxiety, and regulators want to avoid prolonged uncertainty about three of the nation's largest banks.Citigroup agreed to buy most of Wachovia for about $2 billion early last week in a rescue orchestrated by federal regulators. Days later, Wells Fargo agreed to buy all of Wachovia for about $15 billion. Wachovia accepted the Wells Fargo deal because it appeared to be more lucrative for shareholders and would allow the company to be swallowed whole.Wachovia is the largest bank in the Washington area.The bank's deal with Wells Fargo provoked a furious reaction from Citigroup, which had signed an agreement with Wachovia to talk only with each other about a final merger agreement.A series of lawsuits were filed, and hearings were scheduled for this week.But under prodding from regulators, the firms are discussing options including allowing both Citigroup and Wells Fargo to buy pieces of Wachovia.The sense of urgency was underscored by investors, who sold Citigroup's shares down 5 percent yesterday, to $17.41. Wells Fargo fell nearly 3 percent, to $33.64."We are pleased to participate with the Federal Reserve Board in a fair-minded, good-faith process to achieve a prompt and successful outcome," a Citigroup spokeswoman said.Wachovia and Wells Fargo also said they supported a truce.Federal regulators have told Wachovia that it must accept an offer soon because the bank has sustained massive losses on mortgage loans and lacks the money to stay in business. In a recent affidavit, Wachovia's chief executive Robert K. Steel said regulators told the bank that it was about to be seized immediately before Wachovia accepted the Citigroup offer, and again before Wachovia accepted the Wells Fargo offer on Friday.A Wachovia collapse would impose formidable costs on the government, but rescuing the company will also be expensive.Citigroup's initial deal for Wachovia relied on a commitment by the Federal Deposit Insurance Corp. to absorb all losses beyond $42 billion on a $312 billion portfolio of Wachovia's most troubled loans.Wells Fargo's offer does not involve direct government support but instead takes advantage of a tax-rule change that would let the bank use Wachovia's losses to exempt its own profits from taxation. Stifel Nicolaus, a brokerage, yesterday estimated that the change would cause the government to lose $21 billion in tax revenue.Citigroup could claim the same tax advantages against any future profit, although the company has not posted a profit since last fall.Before the truce was declared, both sides had sought the help of their home-state courts.Citigroup asked a New York court yesterday to suspend the Wells Fargo deal, force Wachovia to return to the bargaining table and award Citigroup more than $60 billion in damages."The Citi/Wachovia transaction would have been signed and announced on Friday, October 3rd if it had not been subverted by the unlawful conduct of Wachovia, Wells Fargo, and their officers and directors and outside advisors," the New York company said in a statement announcing the lawsuit.To underscore the point, Citigroup delivered an agreement signed by its executives to Wachovia's lawyers in New York.Meanwhile, a North Carolina judge issued an order restraining Citigroup from interfering in the Wells Fargo deal at the request of two Wachovia shareholders, one of them the company's former chief executive, Leslie Baker.Wachovia also filed a suit in federal court Sunday seeking an order restraining Citigroup.And U.S. Rep. Robin Hayes (R-N.C.) sent federal regulators a letter Friday, warning them against siding with Citigroup, on the grounds that the Wells Fargo deal was better for North Carolina.New York TimesDouble-Dipping in the Offsets Marketplace...Kate Galbraithhttp://greeninc.blogs.nytimes.com/2008/10/06/double-dipping-in-the-offsets-marketplace/?pagemode=printWorkers plant grass as part of a wetlands mitgation project near Cameron Parish, Louisiana, last spring. Can it be traded as a wetlands credit and a carbon credit? (Photo: Michael Stravato for The New York Times) The Northeast’s effort to fight climate change got underway last month, with 10 states agreeing to cap carbon-dioxide emissions and trade allowances to pollute.Among the scheme’s less-noticed ramifications: Carbon traders are seeing an opportunity to enhance their revenue streams in an obscure area of the environmental marketplace known as wetlands mitigation banking. “A lot of carbon money is starting to look at the wetland banking arena,” Morgan Robertson, an assistant professor of geography at the University of Kentucky and an expert on the subject, told me recently. So what exactly is wetlands banking? It emerged in the wake of the Clean Water Act, which, among other things, established strict guidelines for the development of wetland areas. Those rules eventually gave way to a system that allowed limited development of wetlands through the purchase of “offset” credits in wetland restoration projects elsewhere. Take one wetlands area away, the system says, and you must pay for another area to be created, generally within the same watershed — although this often covers a wide geographical area.The credits created a trading opportunity, leading some to look to wetlands banking for lessons on the fledgling credit market. “People in carbon think of wetland banking as an established version of what they would like for carbon trading to be,” Dr. Robertson said. But the parallels between nascent carbon markets and established wetlands credit trading only run so far. The wetlands credit market is far more tightly regulated than carbon trading, said Dr. Robertson, and its regulatory framework is federal, not state — though states set some rules too. (It is somewhat ironic that wetlands protection, a local issue, falls under federal law, while carbon, a global issue, is currently being regulated by states.) Also, wetlands banking, despite its earlier genesis, is a far smaller market than even the newly inaugurated Regional Greenhouse Gas Initiative, which includes just 10 Northeastern and Mid-Atlantic states. Nonetheless, some companies have seen the possibility to make money twice off the same act of conservation, according to Matt Smith of Forecon, a forestry consulting service. How? By peddling the same piece of land as both a carbon offset and a wetland restoration project. This concept, Mr. Smith said, has aroused concerns about “double-dipping” and is now running into regulatory hurdles. Just how the overseers will manage this new permutation in the marriage of environmental protection and capitalism remains to be seen, but Dr. Roberston suggests there will be something of a learning curve. “Regulators who deal with wetlands have not spent much time dealing with carbon,” he said.CNN MoneyFDIC to boost deposit insurance feesAgency seeks to double the average premium that banks, thrifts contribute, based on projected $40B loss to fund.http://money.cnn.com/2008/10/07/news/economy/FDIC_fee.ap/index.htm?postversion=2008100711WASHINGTON (AP) -- The FDIC on Tuesday approved a proposed increase in premiums that will double the average paid by U.S. banks and thrifts next year to replenish the deposit insurance fund.Federal Deposit Insurance Corp. Chairman Sheila Bair made the proposal - which will raise the average insurance premiums paid by banks and thrifts to 13.5% of the value of their insured deposits from the current 6.3% - at a meeting of the agency's board.For institutions deemed to be in strong financial condition - 91% of roughly 8,500 insured banks and thrifts - the average rate would be 11.6%.The U.S. banking industry has the willingness and capacity to provide the necessary backing to the insurance fund," Bair said. "The entire capital of the banking industry stands behind the fund, as does the full faith and credit of the United States government. The public can be sure that we will always have enough money to protect their insured deposits."The FDIC board approved the proposal, putting it out for public comment for 30 days, and it should be formally adopted after that. The board consists of Bair, the heads of the Treasury Department agencies that oversee national banks and thrifts, and two other FDIC officials.Fund below minimumThirteen federally-insured banks and savings and loans - including two major thrifts - have failed this year, and more collapses are expected. The deposit insurance fund is now at $45.2 billion - below the minimum target level set by Congress and the lowest it has been since 2003.The FDIC plan calls for higher-risk institutions to pay bigger insurance fees than others. It is based on a projected $40 billion loss to the insurance fund from bank failures through 2013, and would reduce the industry's average pretax income by 5.6% next year, according to FDIC estimates.$100,000 limitThe FDIC has been working on the plan since July, before the account insurance limit was raised to $250,000 from $100,000, in the $700 billion federal bailout legislation enacted on Friday. The increases proposed Tuesday will cover only up to the previous insured $100,000 limit per account.The plan would take effect in two stages, with an initial set of increases coming in the first quarter and additional rises in the second quarter starting in April.The FDIC's projection of $40 billion in losses to the fund through 2013 includes the $8.9 billion loss from the July failure of big thrift IndyMac Bank.Bair: No cost to taxpayersBair promised Monday there will be no cost to taxpayers if the agency needs to borrow from Treasury to cover the new increase in the federal deposit insurance limit to $250,000. The insurance fund's potential liability has increased with the rise in the insurance ceiling through the end of 2009.The bailout legislation also gives the FDIC unlimited temporary authority to borrow from the Treasury if needed to cover the new insurance limit.If the FDIC needed to borrow from the Treasury to cover the new $250,000 insurance ceiling, the agency would impose an additional fee on U.S. banks and thrifts to cover it. The FDIC hasn't tapped the government coffers for a loan since the early 1990s, toward the end of the savings and loan crisis.FDIC takeoversThe FDIC seized thrift Washington Mutual Inc. late last month in the largest bank failure in U.S. history and sold it to JPMorgan Chase & Co. (JPM, Fortune 500) for $1.9 billion. Last week, it brokered the proposed sale of Wachovia Corp. (WB, Fortune 500) to Citigroup Inc. (C, Fortune 500) for $2.1 billion, agreeing to share potential risk from Wachovia's $312 billion loan portfolio with Citigroup by absorbing losses above $42 billion.That deal fell apart on Friday, however, when Wells Fargo (WFC, Fortune 500) said it had agreed to acquire Wachovia in a deal worth $15.1 billion at the time, without any government support.The 13 bank failures this year compare with three in all of 2007. The Washington Mutual collapse didn't cost the deposit insurance fund anything, but the failure of Pasadena, Calif.-based IndyMac cost it $8.9 billion.Of the 8,500 or so federally insured banks and thrifts, the FDIC had 117 on its internal list of troubled institutions as of June 30, a five-year high.The government's commitment to spend up to $700 billion to buy soured debts from ailing banks is likely to save some institutions that would otherwise have died. But analysts doubt it will be enough to avert a major shakeoutPensions lose $2 trillionCongressional budget analyst says many workers may need to delay retirement.http://money.cnn.com/2008/10/07/news/economy/retirement_meltdown.ap/index.htm?postversion=2008100715WASHINGTON (AP) -- Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers' savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.As Congress investigates the causes and effects of the financial meltdown, the House Education and Labor Committee has heard from retirement savings and budget analysts on how the housing, credit and other financial troubles have battered pensions and other retirement funds, which are among the most common forms of savings in the United States."Unlike Wall Street executives, America's families don't have a golden parachute to fall back on," said Rep. George Miller, D-Calif., the panel chairman. "It's clear that their retirement security may be one of the greatest casualties of this financial crisis."More than half the people surveyed in an Associated Press-GfK poll taken Sept. 27-30 said they worry they will have to work longer because the value of their retirement savings has declined.Orszag indicated the fear is well-founded. Public and private pension funds and employees' private retirement savings accounts - like 401(k)'s - have lost some 20% overall since mid-2007, he estimated. Private retirement plans may have suffered slightly more because those holdings are more heavily skewed toward stocks, Orszag added."Some people will delay their retirement. In particular, those on the verge of retirement may decide they can no longer afford to retire and will continue working," Orszag said.A new AARP study found that because of the economic downturn, one in five workers 45 and older has stopped putting money into a 401(k), IRA or other retirement savings account during the past year, and nearly one in four has increased the number of hours he works.Relax - your pension is safeThe good news: The money you've already made isn't going anywhere. The bad news: your plan's days are probably numbered...Janice Revellhttp://money.cnn.com/2008/10/07/retirement/pension_safety.moneymag/index.htm?postversion=2008100714(Money Magazine) -- With the stock market cratering, and once-venerable financial institutions biting the dust, you might be wondering about the safety of your traditional pension plan. I've got some good news and some bad news.The good news is that the pension you've earned to date can't be taken away from you; it's protected in a host of ways. The bad news is that if you're one of the lucky 30 million American workers still covered by an old-fashioned pension, the odds are pretty good that your company will jettison the plan before your career is over.Here's what you need to know:The ground rulesTraditional pension plans give you a guaranteed annual payment upon retirement, based on your final average salary and your years of service. Your company puts up all or most of the money, and unlike the case with a 401(k) plan, the benefit you accumulate under a traditional pension can't be demolished by a plunging stock market.Even when markets are tanking, as they are today, corporations are required to keep their defined-benefit pension plans well-funded. Back in 2006, Congress passed legislation, called the Pension Protection Act, that put in strict new rules dictating how much cash a corporation must inject into its pension plan each year to keep it healthy.Once your pension is "vested" - which generally happens after you've been on the job for five years - you're legally entitled to a payout when you retire. Even if you quit your job or your company discontinues its pension plan, you'll be entitled to the pension you earned up to that point. You'll usually have to wait, though, until you hit the plan's eligible retirement age (age 55 in most cases) to collect it.Even if the worst-case scenario plays out and your company goes bankrupt, you'll likely still collect all or most of the pension you've earned to that point. Corporations are required by federal law to pay premiums to the Pension Benefit Guaranty Corp., the government agency that steps in to provide promised benefits to the employees of bankrupt companies.The benefit amount that the PBGC covers is set each year by Congress - the maximum benefit for 2008 is $51,750 annually, or $4,312 a month, for someone who is retiring at age 65; the benefit is lower for people who retire earlier than that.The deep freezeIn truth, the biggest risk you face is that your company will simply discontinue, or "freeze," the pension plan moving forward. If that happens, you'll be entitled to the pension benefit you've earned to date, but you won't accumulate any more benefits moving forward.There's nothing legally stopping companies from freezing their pension plans - and there's plenty of reason why they might be tempted.Traditional pension plans are a risky financial proposition for employers: If the plan's assets don't generate enough income on an annual basis to pay for the retirement benefits earned by workers, the employer must make up the shortfall. That means diverting cash flow from other uses like shareholder dividends, debt repayments and investments in new operations. Most pension plans have the majority of their assets invested in stocks, so the brutal market we've experienced this year will undoubtedly require companies to cough up more cash than usual.In recent years, a growing number of big companies, including IBM (IBM, Fortune 500), Verizon (VZ, Fortune 500) and Hewlett Packard (HPQ, Fortune 500), have decided to freeze their pension plans and put their workers into a 401(k) plan. The consulting firm McKinsey estimates that by 2012, 50% to 75% of all corporate pensions will be frozen by 2012 (compared to about 25 percent in 2007).The problem with a freeze is that your pension benefits are forever stuck at their current level.Let's say, for instance, that you're 50 years old, you've been with your employer for 20 years and you've so far racked up a pension equal to $2,500 a month, payable at retirement. If your company didn't freeze the plan, your monthly benefit would continue to grow with each additional year you remained on the job.By age 60, for example, your pension would likely be at least double what it is today. But if your company froze the plan today, the $2,500 a month would be locked in - that's what you'd get at retirement, no matter how much longer you stayed on the job. And, of course, the purchasing power of that $2,500 would be seriously eroded by inflation by the time you retire.State and local plansSo far, I've been focusing on corporate plans. If you work for a state or local government, you're at much lower risk. The rules governing corporate plans do not apply to public sector pensions, which are typically protected by state law and backed up by tax revenues.In the public sector, pension freezes for existing employees are incredibly rare, thanks mostly to the presence of strong unions that represent teachers, police, firefighters and other government workers.About 90% of all state and local workers are currently covered by a defined benefit pension plan, a proportion that has barely budged over the past two decades.